The man sitting at New York’s Penn Station talking into his Smartphone on a dreary, humid, rainy Monday night about to catch the 10:10 pm train home could have been the Googled image for “forlorn.” I could hear the exasperation in his voice as he was sharing with the person on the other end about the terrible day he had and his feeling that “Retail as we knew it is dead” and the “this next generation of consumer wants to buy clothes from an app just like they ride around in Uber town cars.”
Everyone in the surrounding area could hear the man talk about his meeting with a large department store and how the store was exiting menswear because of increased internet competition from companies that can provide better quality, custom clothing faster and cheaper than retail. “We might as well close the business down…there’s nothing left.”
This is a story that is happening every day, in many ways, in different industries going through transformational change. However, do not believe for a moment that transformational change is happening just because of the Internet of Things or increases in technology. It’s not. There was a business person in the horse and buggy business in the early 1900’s lamenting the end his business the same way the man in the train station was as those new-fangled cars were starting to come off the assembly lines.
Business strategy is your roadmap to success as it helps navigate the path to victory and in many cases the path away from defeat. Because it’s easy to get bogged down in the details and the distractions of the daily work and forget about being strategic, too often the leaders who set strategy and the employees who execute it become disengaged from the five things that make strategy execution work. For any leader setting strategy or any manager responsible for strategy execution, here’s a quick revisit of the five questions of business strategy you should be thinking about when implementing and executing:
1 - What is our value proposition to our customers?
The first and most important part of any strategy is having a clear and distinct value proposition to your customers. Is it a product focus? Is it a customer focus? Or is it a cost focus? How do you differentiate and how do you choose to be different? Once you have a clear value proposition it’s just as critical to make sure everyone in your own company knows what it is and how to execute it.
2 – Where are you going to compete?
A great strategy has focus and limits; you can’t be all things to all people and all customers. You need to find the right markets and locations to compete in and make sure your value proposition is the right one for the right customers in the right locations.
3 – How will we win against our key competitors?
Every business and every market has or will have competitors. A critical part of strategy selection and execution is making sure you understand how to win against key competitors. Please note; that’s key competitors and not every competitor. Ultimately this element will come down to how do you develop and deploy the right message to customers to position your value proposition versus the value proposition of competitors including their weaknesses.
4 – What capabilities are needed to achieve success?
To successfully compete; strong and differentiated capabilities are also needed. For example, if you are pursuing an innovation/product leadership strategy, you need resources and people who know how to be innovative and create a culture of innovation. If you are pursuing a strategy of cost leadership, you need capacity, great supply chain management, and a culture that drives cost out of the system.
5 – What business systems are required to achieve success?
The final question to ask is what systems need to be in place to achieve success? Business systems refer to things such as IT systems, supply chain management system, sales force automation systems, etc. that support the ability to execute the strategy.
In summary, coming up with a strategy is relatively easy. Executing it is extremely difficult. The best leaders come back to these five powerful business questions every day to make sure they are making the right decisions and doing what is necessary to execute to success.